For the third straight time, the Federal Reserve kept rates steady, but the message last night?
Uncertainty is rising.
Unemployment is ticking up.
Inflation risks are creeping back in.
Powell dropped “Wait and see” 11 times — and markets listened. The S&P 500 dipped, then reversed to close +0.43%.
Behind the calm front, Powell’s tone was clear:
The Fed is walking a tightrope.
Soft data shows cracks.
Hard data shows strength.
Tariffs distort the GDP view.
Consumer spending might surprise to the upside.
When pressed: Jobs vs. Inflation?
Powell hinted: A trade-off may be coming.
Trump? Still pushing for cuts.
Powell’s response: “We cannot act preemptively.”
No meetings. No influence. The Fed stands independent.
According to CME's FedWatch:
June Rate Cut?
80.2% chance NO change
19.8% chance of a 25bps cut
July?
Only 28% chance of staying put
Over 70% chance of some form of CUT
Translation?
The Fed is holding the line — but the cracks are forming.
Markets are bracing.
Are you ready for what’s next?